Yen Crosses

I think some of the Yen pair like AUD/JPY, EUR/JPY and USD/JPY are going to see downside very soon, this is not market supportive.

Remember the 2-part Yen article about 4 weekends ago (I spent about 10 hours on it), well the conclusions I came to look like they are coming to pass, the break out of the Yen will almost certainly correspond with a very nasty patch in the stock market.

Here are a few Yen charts...

 Yen 1 min intraday, I think this alone will do some damage to the market, the positive divergence suggests the Yen is about to make a push higher, it will probably correspond with an afternoon break in the market.

Yen 5 min which is a more serious timeframe, is also in a strong positive divergence and has some fuel in the tank now, but this gets much worse.

The 15 min chart is just at a normal correction and ready to resume its move higher, the 1 and 5 min charts are the charts that will move it higher and the divergence will almost certainly migrate across the 15 min, but the positive is already there, I just don't have enough history to show you the entire thing.

 Yen 60 min is a VERY serious timeframe, it shows the strong distribution just before the BOJ new QE policy was announced, that was about 8 hours of distribution before the announcement and Yen crash. The positive divergence at this rounding bottom is what I was thinking we would see when I wrote that weekend special, "Currency Crisis", so far everything I expected to happen has happened. It looks like the BOJ may have lost control.

 Look at the size of the leading positive divergence on the 4 hour chart of the Yen

This Daily chart is EXTREMELY strong underlying flows of money, don't let the smaller divergences fool you.they represent huge flows. There's not a single positive divergence in the entire Yen downtrend sionce October of last year just as the carry trades were being put on for the Nov., 16th cycle low. Now we have a positive divergence in the trend and right where the BOJ policy announcement was. The sharp fall in price is like capitulation, all weak hands were washed out, accumulation started the next day and has continued ever since. This reversal in the Yen will have far reaching effects on all kinds of assets and few stock traders will have little if any idea what is really moving the market.